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What happened

Shares of Calumet Specialty Products Partners (NASDAQ:CLMT) surged close to 24% in August. The company did post slightly better-than-expected operational results at the beginning of the month, but a 24% gain for getting over a pretty low hurdle to begin with does seem a bit much. 

So what

There haven't been a whole lot of reasons to be bullish on Calumet's future as of late. The company is still dealing with the repercussions of its spending spree years ago that hasn't generated the returns that management had hoped. That's why, despite the decent pickup in August, shares of Calumet are still down 72% year to date. It's going to take a heck of a lot more than a 24% gain to make up that much ground. 

The other thing to keep in mind is that there wasn't much to celebrate this month that would really change things, either. Sure, there was the writedown of its investment in Dakota Prairie Refining that turned out be a bit of a bust, and its specialty products segment continues to generate decent operational profits. However, that is all overshadowed by the fact that its other businesses are hemorrhaging money and the company is relying on debt to cover operational cash shortfalls.

Now what

Unless we see a rapid turnaround in refining margins and Calumet is able to get its costs under control, chances are this 24% gain will be rather short-lived. There isn't a whole lot to like about the company's prospects, and  anyone looking at this company long term should be wary of any short-term price movements that might suggest things are getting better. Until we see some tangible operational performance that shows a company with efficient operations and a positive cash flow, it's best to just stay away. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.